E-commerce giant Alibaba surprised everyone by partnering with American based startup Lolli to reward Alibaba buyers with cashback in the form of Bitcoin. This was however short-lived and did not live up to expectations as anticipated by shoppers. The partnership was said to have lasted only 24 hours before the contract was broken. Alibaba denied the partnership and Lolli refuted the denial of the partnership.
The affiliate partnership between Alibaba and Lolli was to enable Alibaba shoppers with 5% cashback on Singles day which is the Chinese annual shopping holiday currently one of the biggest shopping events in the world. Buyers would get cashback in Bitcoin when they use Lolli’s in-browser shopping app.
Alibaba, however, denied such kind of partnership. It may be due to the reason that Alipay which is the payment subsidiary of Alibaba does not support Bitcoin or any cryptocurrencies on its platform which is per the Chinese law. When the marketing campaign for the singles day got too popular, Alibaba had to take defense gear as it would be equated by the law as supporting Bitcoin which may give it problems with the relevant authorities.
According to Lolli, as much as Alibaba denies the partnership, Lolli has been in partnership with Alibaba through AliExpress from May.
According to Lolli, the partnership was a great chance to connect China and the US which are both large economies. The cashback was only available to US users for a start.
Lolli’s CEO Adelman maintains that they both agreed to launch the partnership for Singles day and thus it is unfair for Alibaba to deny any partnership. According to him, Alibaba used the services for 24 hours before breaking the contract and the partnership. According to the contract, Lolli had the right to use Alibaba as a brand in marketing and various activities. That, therefore, means that if Alibaba denies the partnership it will harm Lolli as a brand. Adelman thinks that maybe there was a miscommunication on Alibaba’s end and that’s why things turned out that way but they still hope for a corporation in the future.
According to Alibaba’s spokesman, there was a miscommunication and that brought all that misunderstanding. It is one of Alibaba’s subcontractors that brokered the affiliate program with Lolli without informing Alibaba. The subcontractor will no longer be working with Lolli and hence Lolli has no right to promote Alibaba.
There was a misrepresentation of the announcement that indicated that Alibaba was accepting Bitcoin directly. This may give it problems with the Chinese regulators.
China’s authorities have not been very friendly to cryptocurrencies due to money laundering and that has forced the Chinese retail giant to comply. That simply explains why Alipay has been very strict when it comes to Bitcoin. In October, Alipay said it will not process any transactions linked to Bitcoin or any cryptocurrencies.
AS much as there is so much uncertainty of Alipay accepting Bitcoin soon, there is still hope for some corporation with Lolli in the future. Lolli is strongly optimistic of some cooperation with the Chinese giant and it looks forward to it. Already the situation with cryptocurrency in China is getting better giving more light to the whole subject soon.
Photo by David Shares on Unsplash
Don’t worry, we hate spam too
one weekly digest, just the important stuff.
